September 11, 2023

Blockchain Bridges Explained

Blockchain Bridges Explained

Since the arrival of Bitcoin and blockchain back in 2008, it’s endured quite the transformation into the technology we see today. As the space continues to grow, with more blockchains being developed, we’re rapidly discovering how integral it is for blockchains to be able to communicate and work together. Enter blockchain bridges.

Traditionally, blockchains have been isolated communities, meaning once a project has selected its blockchain, it’s committed to only serving users on that chain. Interoperability is crucial to the continued growth of these once-singular ecosystems and economies.

In this article, you’ll uncover what a blockchain bridge is, why we need to bridge between blockchains, the different types, and the risks they present.

What Is A Blockchain Bridge?

As the name suggests, a blockchain bridge is a tool connecting two different blockchains. There are multiple methods in which a cross-chain bridge can work, but overall, they aim to enable interconnected ecosystems.

As each blockchain was built within its own parameters, cross-chain communication is impossible without blockchain bridges. They form the middle ground allowing dApps developed on different chains to communicate and work together. This is crucial for the continued growth, adoption, and adaptability of blockchain ecosystems.

Why Do We Need Blockchain Bridges?

Before blockchain bridges, once a business, project, or developer had chosen the blockchain they chose to create on, they are tied to it. This limits the potential audience they can reach and the tools they can access.

With global brands such as Adidas, Nike, Gucci, and others entering the blockchain space, developers need to find more ways of becoming interconnected. Although these brands have selected Ethereum as their blockchain of choice, there will come a time they need to branch out – blockchain bridges enable this.

If brands and projects are limited to one blockchain, they’re limiting their reach. As the adoption of blockchain technology increases, cross-chain transactions and working will become the norm. There will be Nike enthusiasts and potential customers using Solana, for example.

Types Of Blockchain Bridge

Trustless Blockchain Bridges

Trustless blockchain bridges are essentially decentralized bridges. They are called trustless because users don’t have to put trust in a single entity or corporation to facilitate their usage. Essentially, code, algorithms, and smart contracts take control of the entire process. There is no human interference as an intermediary.

Trusted Bridges

On the flip side, trusted bridges are very much centralized. They’re owned, run, operated, and overseen by an intermediary. Therefore, at some point in the cross-chain transaction process, the bridge retains control over the asset you’re transferring. Hence the name. You have to place your trust in a third party.

As with most trusted, centralized blockchain tools, trusted bridges tend to be more user-friendly, have better-developed features, and are easy to use.

Bidirectional Bridges

This favorable variant of the blockchain bridge enables the free flow of transactions between two different blockchains. What this means is users can freely execute transactions back and forth from Ethereum to Solana, for example.

Unidirectional Bridges

A little less user-friendly, and offering half of what a bidirectional bridge does – a unidirectional bridge is essentially a one-way street. For example, users can complete transactions from Ethereum to Solana but can’t send anything from Solana to Ethereum.

The Future Of Blockchain Bridges

Blockchain bridges are in their infancy, much like the entire defi space. However, if implemented correctly, the best blockchain bridges will bring a sense of freedom and interconnectivity to the blockchain space.

With connected blockchains, the scope of user numbers, improved dApps development, increased opportunities for investors, and much more. Expanding the functionality of blockchain bridges will enable collaborations cross-chain, opening up opportunities for developers and projects to increase the utilities they offer, enhance experiences, and offer users more.

The Risks Of Blockchain Bridges

One of the most reported challenges faced by blockchains is hacks. Some of the largest cryptocurrency hacks have been completed by infiltrating blockchain bridges. As mentioned, like much of the industry, creating a bridge between blockchains is in its infancy. Much development needs to occur to produce reliable and secure solutions that are able to scale as user demand increases.

At this stage, it’s highly likely that only trusted (centralized) bridges will be able to dedicate the time and money needed to develop the tools needed to make this work for everyone. However, they are the platforms most at risk of hacks, as we’ve seen with many centralized exchanges.

With little protection for users and little-to-no legislation in place, users will be risking losing the funds they transfer to the blockchain bridge.

In Summary

Bridging blockchains is essential for the future expansion and adoption of blockchain technology. They empower projects, developers, and users to work cross-chain rather than having to remain within the limiting parameters of a single platform.

Although in their infancy, blockchain bridges are already being effectively implemented to allow collaborative work and development and make it easier to freely transact from chain to chain.

However, they come with risks, and much development is needed. The entire blockchain space is still learning, growing, and developing. One thing’s for certain, blockchain bridges will be an integral part of the future.

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